Finally found a potential first property... marijuana advice

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Hello,

After evaluating probably over 100 properties in the Durham region I was excited to go visit the first property that really met all the key metrics (first and foremost being cash flow positive).

I arrive at the property and greet the agent. The agent was told the tenant would not be there. Well, not the case. In fact, the current tenant refused to leave. The tenant is not rude about it and encourages us to view the property. The tenant and two other people hang out while we view the property. As we enter I smell marijuana. Not a big deal I think to myself--so what if they have the odd joint. But then I go into the den and see an aquarium (?) with 2-4 marijuana plants...

Oh boy.

What should I do here? The property is great. Really good value, high rental demand. It makes a lot of sense. This is not some seedy part of town where you would expect to find such activity. I've been doing some research and apparently these plants can do serious property damage. Do I have grounds to evict the tenant? I don't even know if it's illegal to have a few plants for personal use?

Man, what a bummer.
 

TrevorW

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#3
Not sure what qualifies as a grow op, but check the PDS and see if the owner is disclosing it. That would have a big effect on your ability to refinance.

The plants themselves don't necessarily do damage, it is the hydroponics and crappy workmanship of the growers that does.

A few plants under a heat lamp probably isn't a big deal, which is likely why you got the response you did from Thomas

If you write on the ppty, try and get vacant possession. May be hard to do if you are not planning on occupying the property.
 

James Benson

James
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Apr 30, 2015
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#4
Not sure what qualifies as a grow op, but check the PDS and see if the owner is disclosing it. That would have a big effect on your ability to refinance.

The plants themselves don't necessarily do damage, it is the hydroponics and crappy workmanship of the growers that does.

A few plants under a heat lamp probably isn't a big deal, which is likely why you got the response you did from Thomas

If you write on the ppty, try and get vacant possession. May be hard to do if you are not planning on occupying the property.
The plants themselves could actually cause damage if there is enough of them due to the moisture. But two plants is not any worse than having a few flower pots in your house, the smell aside. It's possible that they have a green card since they where so relaxed about showing the house.
 

Quantized

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Thanks for your input. Thomas, I'll stick to the odd beer ;)

I am not occupying so asking for vacant possession won't fly. The current owner, who's a developer, will be very reluctant to force the tenant out. This is nothing but a small nuisance for them so the last thing they want to do is expend money and mental energy dealing with the situation.

The plants are in an aquarium type thing. If you didn't see the plants inside you'd think nothing of it. The potential long term damage is an issue of mine, but it's probably not a huge deal.

The other concern is if they're dealing. Can one really have a side business with a few plants? (I really don't know anything about this, lol). What if the cops find out that they're growing and dealing and then I'm in trouble as the owner (and obviously aware of they're activities, although under the impression it was for personal use). I've read a few cases where real estate has been seized even though the owner did not know what was going on.

Maybe I'm making too big a deal out of this?
 

Julien3695

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I think you might need to have a conversation with the current tenant. Let them know about your concerns about the possible criminal activity and your plans to also discuss your concerns with the local police if your find any sort of evidence to support your fears. Be really cool and diplomatic about it. If they are really dealing drugs they will pack up shop really quick if they even suspect you might drop a dime on them.
 

23994

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#9
if you have not bought the house, why bother to this property? I think the risk is not worth here, there will be always good property in the future...
 

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#10
Hi everyone,

I took your advice and spoke the tenant. Before I proceed let me tell you what I'm about to say is embarrassing and 100% hilarious. It's not pot. It's a gecko aquarium with fake and real plants. Thankfully I played it cool. I said, "so what's the story with the aquarium in the den?" And then she explained.

So you're thinking how could I confuse the two? Well as I mentioned above the place smelt like pot. Two of the three tenants were in the den so we couldn't really get a good look at it. They weren't enthusiastic we were there and we felt too awkward to ask them to leave. We saw the aquarium, the lights, and the plants from about 15 feet away and our first thought was that they were marijuana plants.

I'm very happy that I spoke with the tenant since she revealed a lot of stuff about the place that I did not know. These would have been brought up by a property inspector but knowing the issues before hand has given me a bit of negotiating leverage.

This is a great opportunity, by far the best I've seen of the hundreds I've looked at since I read Don's book. Motivated seller. Good tenant paying close to market rate that wants to stay. Great location. Turn-key operation. I'll be netting close to $250 in cash flow per month on this $200,000 property.

Thanks for your input and advice!
 

kfort

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Good work. Current tenants can be an incredibly valuable resource. If possible, I ask "what are the two best things & two worst things about living here?" If they mention the roof leaks or the dishwasher still doesn't work or the floor drain backs up every 3 months... Valuable info!
 
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Tina Myrvang

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Thank you for the great laugh. I have been following this thread and was curious what the outcome was. When I read above I burst out laughing. I'm glad this will work our to your benefit now.
 
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#13
Good work. Current tenants can be an incredibly valuable resource. If possible, I ask "what are the two best things & two worst things about living here?" If they mention the roof leaks or the dishwasher still doesn't work or the floor drain backs up every 3 months... Valuable info!
Yeah, that's the key takeaway here, and such a valuable lesson for me. From now on I will do my best to speak with current tenants.

Tina Myrvang said:
Thank you for the great laugh. I have been following this thread and was curious what the outcome was. When I read above I burst out laughing. I'm glad this will work our to your benefit now.
:D